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LONDON (Alliance News) - WPP PLC Thursday reported a near 20% rise in pretax profit to GBP1.3 billion and a 6% boost in revenue after making good progress despite currency headwinds and tough market conditions
Revenue for the full-year rose 6.2% to over GBP11.01 billion, supported by like-for-like growth of 3.5% and following a strong period for acquisitions, specifically boosting revenue 2.2%. The firm said 0.5% of revenue growth is attributable to currency.
Pretax profit rose to GBP1.3 billion from GBP1.09 billion in 2012.
The firm said it saw like-for-like revenue growth across all regions, characterised by strong growth in Asia Pacific, Latin America, Africa and the Middle East and the United Kingdom.
In its preliminary results for the year to December 31 2013, WPP said reported billings for the year increased to GBP46.2 billion for the year, up 4.1%, buoyed by strong leadership in all net new business league tables, it said.
The media buying giant said its operating margin for the year reached a historical high of 15.1%, up 0.3 margin points; up 0.5 margin points in constant currency and 0.6 margin points like-for-like.
The firm notes that exchange rates impacted its result in the second-half, resulting in reduced operating margins as the strength of Sterling against many other currencies by 10-20%. While hitting figures consistently throughout the year, WPP said this escalated in the final quarter of 2013, resulting in a full-year impact of 0.2 margin points.
WPP earnings per share rose 10.8% to 69.6 pence on the 62.8 pence per share for 2012, with headline diluted earnings per share at 80.8 pence, up 10.1%.
The firm said dividends per share have also risen, up 20% with a pay-out ratio of 42%, up on the 39% last year. Looking ahead, the firm has targeted a dividend pay-out ratio of 45% for 2014 full-year.
WPP said trading in 2014 has commenced encouragingly, with like-for-like revenues in January up 5.7%, ahead of budget and up on the last quarter of 2013. For full-year 2014, the company expects like-for-like revenue and gross margin or net sales growth of over 3% and headline operating margin target improvement for both of 0.3 margin points, excluding the impact of currency.
During the course of the year WPP will retain a dual focus, it said, including revenue growth due to, "faster growing geographic markets and digital, premier parent company creative position, new business, "horizontality" and strategically targeted acquisitions; [and] continued emphasis on balancing revenue growth with headcount increases and improvement in staff costs/revenue ratio to enhance operating margins."
Shares in WPP dropped to the bottom of the FTSE 100 at the market opening, trading at 1,263 pence per share, down 5.11%.
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
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